As a salesperson, Ms. Jackson and has been thinking of moving to a bigger city like Vancouver

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Question:

As a salesperson, Ms. Jackson and has been thinking of moving to a bigger city like Vancouver to expand her sales. After making many
enquiries and job interviews she has received two job offers, Company A and Company B. Both employment contracts would commence on January
1, 2021. Details of the offers are listed below:

Company A ‐ Job Offer

i) Mr. Jackson's gross salary for the year ending December 31, 2021 would be: $228,000
This would is the annual salary and there is no commissions.
ii) Company A would withhold the following amounts from her income:
Federal Income Tax Withheld at Source $57,000
CPP Contributions Withheld at Source 3,166
EI Insurance Premiums Withheld at Source 889
Union Dues 390
Employee's RPP Contributions 11,400
iii) Company A would also make a matching contribution to the RPP in the amount of: $11,400

iv) Company A would lease a vehicle for Ms. Jackson at the start of her employment and she would have exclusive use of the vehicle for the duration of her employment.

Lease Payments per month is: $530 Includes Lease Insurance per month of: $58
The company would pay for all of the operating costs of the automobile which are estimated to be: $18,000
v) The company would reimburse Ms. Jackson Travel costs for Hotel, Meals and Airline. Anticipate cost of: $28,900

The reimbursement will be based on actual receipts that Ms. Jackson will submit to Company A following each trip.

vi) Ms. Jackson would be required to pay for any Advertising, Promotion or Entertaining Client expenses.

vii) Company A would provide a loan to Ms. Jackson so that she can have additional funds for her investment portfolio. The loan would be required
to be repaid after five years. The loan would commence on January 1, 2021 and the required interest would be paid annually on December 31.

Loan Amount $127,000
Interest Rate on Loan 0%
Prescribed Interest Rate for 2021 8%

viii) Company A will provide the following disbursement for Ms. Jackson in 2021:
Tuition for Sales for Salesperson Course $1,200
Fees paid for financial investment planning counselling session $400
Recognition of Ms. Jacksons birthday ( gift card to restaurant) $150

Company B ‐ Job Offer

i) Ms. Jackson's gross salary for the year ending December 31, 2021 would be: $183,000
ii) Ms. Jackson would also earn commissions based on her sales which are estimated to be: $27,000
iii) Company B would withhold the following amounts from her income:
Federal Income Tax Withheld at Source $52,500
CPP Contributions Withheld at Source 3,166
EI Insurance Premiums Withheld at Source 889
Employee's RPP Contributions 10,500
iv) Company B would also make a matching contribution to the RPP in the amount of: $10,500

v) Company B would pay for a Group Medical Plan with Sun Life for Ms. Jackson at a cost of: $1,400

vi) Company B will provide an allowance for travel costs incurred for employment for Hotel, Meals and Airline .

This allowance will be considered reasonable by the CRA and is estimated to be a total of: $31790

vii) Ms. Jackson would be required to pay for any Advertising, Promotion or Entertaining Client expenses that she wishes to purchase to expand her
sales.

viii) Company B will not provide Ms. Jackson with a vehicle but will provide a monthly vehicle allowance of: $1,600
ix) Ms. Jackson estimates that the total costs associated with owning a vehicle in 2021 will be:
Operating Costs $11,800
Capital Cost Allowance ( Tax Depreciation) (100%) $4,600
Financing Costs $1,600
Other Information:
The following information is applicable to both of the alternative offers.
1. Both offer include a $1,000,000 face value life insurance policy. The company will pay all of the premiums: $3,900
2. Employment related expenses for 2021 are estimated to be as follows:
Hotels $11,800
Air Travel $8,300
Meals incurred while travelling $8,800
Advertising and Promotion $19,000
Entertaining Clients $5,700
3. Whether it is the employer's automobile or her own personal vehicle, she would use the car throughout all of 2021.

57,000 KM are estimated to be driven in total for 2021
44,000 KM are anticipated by Ms. Jackson to be related to employment activities.

4. Ms. Jackson will be required to provide a home office where she will have a separate room used exclusively to meet clients on a regular basis. The employer will sign and provide a T2200 for the year.

The annual costs related to her home are provided below:
House Insurance $1,200 Property Taxes $4,000
House Heating Costs $2,500 Mortgage Interest $18,800
House Power Costs $2,200 Painting (office space) $160
Purchase of Laptop Computer $2,500
Total Square Footage of Personal House: 2,000
Total Square Footage of Home Office: 150

Required:

1. (a) Calculate Ms. Jackson's minimum Net Employment Income for the year ending December 31, 2021 for the employment offer from Company A.(provide all calculations and explanations)

1. (b) Calculate Ms. Jackson's minimum Net Employment Income for the year ending December 31, 2021 for the employment offer from Company B.
(provide all calculations and explanations)

2. Explain one advantage and one disadvantage from each employment offe